THE PRICE OF APPROVAL: WHAT IT COSTS FOR A NEW DRUG TO OBTAIN FDA APPROVAL

Winning FDA approval for a new drug or medical treatment requires extensive--and expensive--human trials for safety and effectiveness. Costs vary widely, depending largely on the conditions being treated and the number of subjects required. Roughly 50 stem-cell cardiac therapies are currently in trials in the United States. Among them are these two, both designed for "no hope" populations, meaning that relatively few participants are required--perhaps 100 to 300.

Estimated cost of clinical trials for therapy developed by Cedars-Sinai Heart Institute in Los Angeles and the small biotech company Capricor: $7 million to $10 million

Estimated cost of clinical trials for Louisiana-based TCA Clinical's treatment for severe coronary ischemia, now in Phase II: $13 million

When wider applications are involved, costs increase dramatically. Here are the latest estimates for bringing a new drug to approval from Joseph DiMasi, director of economic analysis at the Tufts Center for the Study of Drug Development, who updated the center's most recent data to account for inflation.

Average out-of-pocket cost of developing a new drug, from inception to approval: $494 million

Average out-of-pocket clinical cost for each new drug: $153.2 million

Average out-of-pocket cost for each phase of clinical trials:
Phase I - $18.6 million
Phase II - $28.8 million
Phase III - $105.8 million

 

COMMENTARY: I knew it was very expensive to obtain FDA approval for a new drug, but these numbers blow me out of the water.  Developing a new drug from inception to approval is absolutely obscene, but the pharmaceutical industry is doing quite well, thank you very much.  They are doing so well that their Washington lobbyists have paid over $1.3 billion to Washington politicans to make sure their political and economic interests are protected and be able to pay their CEO's over $20 million per year in annual compensation, stock options, and other corporate perks.  

 

Courtesy of an article dated December 1, 2009 appearing in Fast Company